KARACHI: A flare-up in tensions between the US and Iran could aggravate Pakistan’s economic situation, forcing the country – which relies heavily on oil imported through the Strait of Hormuz – to work toward defending its economic and political interests, analysts said on Tuesday.
A flurry of attacks in and around the Strait of Hormuz – the busiest transit lane for seaborne oil supplies that splits Iran from its Arab neighbors – has left six oil tankers damaged since May this year, adding to the tensity between Washington and Tehran.
The US authorities hold Iran responsible for the mounting attacks on the oil tankers, an allegation which Iran denies.
In June this year, US Secretary of State Mike Pompeo said: “This assessment is based on intelligence, the weapons used, the level of expertise needed to execute the operation, recent similar Iranian attacks on shipping and the fact that no proxy group operating in the area has the resources and proficiency to act with such a high degree of sophistication.”
In a worst case scenario, analysts expect Asian countries, including Pakistan, to be engulfed by the flames of war and increasing oil prices in the Gulf region.
“As the global economy relies heavily on oil supplies, closure of the Strait of Hormuz [will lead to] a sharp increase in prices, which will cause panic in all world markets. In this situation, Kuwait, Qatar, Bahrain, Iraq and the UAE will stop shipping oil containers, and Saudi Arabia will be forced to export its oil through the Red Sea ports,” Omid Shokri Kalehsar, a Washington-based Senior Energy Security Analyst and Visiting Research Scholar at Center for Energy Science and Policy (CESP) and Schar School of Policy and Government at George Mason University, told Arab News.
“In this case, the conflicts will take place in the peak region, which will lead to a military confrontation,” Shokri added.
Starting from yesterday, Pakistan began receiving oil supplies from Saudi Arabia on deferred payments worth $275 million a month. “These supplies will continue over the next three years with a total value of $9.9 billion,” a statement issued by the Saudi embassy in Islamabad said on Monday.
In October last year, the Kingdom of Saudi Arabia had announced an economic support package for Pakistan which included $3 billion for supporting the balance of external payments. The package also included oil imports on deferred payments. The agreement between the two sides reached a total amount of $20 billion, the statement added.
Additionally, Saudi Aramco will supply 110,000-115,000 barrels of crude oil to Pak-Arab Refinery and National Refinery on a daily basis.
Pakistan has imported petroleum crude worth $4.2 billion, 12% higher, during the July–May period of the outgoing fiscal year ending on June 30 as compared to $3.7 billion, according to the Federal Bureau of Statistics.
However, analysts argue that – despite the Kingdom’s generous offer – supplies would be affected by any “dangerous escalation” between Iran and the US. Pakistan meets 85% of its oil needs through imports.
“Pakistan’s majority of oil and Liquefied Natural Gas LNG passes through strait of Hormuz. Obviously, a major increase in price, insurance and risk premium is going to be costly for Pakistan,” Samiullah Tariq, Director Research at Arif Habib Limited, said.
Amid rising tensions in the Gulf region, “the insurers have increased the premium of those vessels crossing strait of Hormuz,” Masood Abdali, a Texas-based energy expert and former business development manager of Weatherford, Saudi Arabia and Bahrain, told Arab News.
“There are slim chances of a US-Iran war,” he said, adding that in a worst case scenario “if the Strait of Hormuz is closed, Pakistan and Asian countries would suffer much.”
“Pakistan’s lower capacity of oil storage could be the matter of the country’s security,” he added.
“Security of supply is very vital for both exporters and importers. Any tension and any possible confrontation in the Strait of Hormuz is not in favor of world oil market,” Shokri said.
Meanwhile, defense analysts ruled out Pakistan’s neutrality amid the regional flare-up.
“Pakistan has a very clear stance that if Makkah and Madinah are attacked, we would stand up to defend it. I don’t think if any country attacks Saudi Arabia, Pakistan will not be involved. Pakistan can and would play a role of mediator between Arabs and Iranians,” Lt. General Retd. Naeem Khalid Lodhi, former minister of Defense and National Security Division told Arab News.
Lodhi appreciated the wisdom expressed by Saudi and other Arab leaders in the face of terror attacks on oil tankers. “I think Arabs and their leadership have expressed best example of tolerance, despite the fact that tankers were attacked in their areas and around. This was display of wisdom of higher degree. They have understood the conspiracy,” Lodhi said.
“In case of war smuggling of oil from neighboring Iran to Pakistan would increase, though the Pakistani government would try to stop such illegal inflow but it won’t be so easy to handle the situation,” Lodhi added.
Analysts believe that despite the sanctions imposed by the US, Iranian oil continues to be supplied to the world market – a fact which is being ignored by the US.
“Reports indicate that Iranian oil supply is not fully suspended. Iran is selling oil to a number of Asian countries, but payment is made in a third country. In this situation, it is in the interest of Iran that the Strait of Hormuz remains open for oil transportation,” Abdali said.
“Iran needs to revise its regional foreign policy. Iran with huge oil and gas reserves needs active energy diplomacy to be a key player in the regional and world energy market. De-escalation of foreign policy would help Iran solve its problems with the US,” Shokri added.
Closure of Strait of Hormuz could spell economic doom for Pakistan
Closure of Strait of Hormuz could spell economic doom for Pakistan
- Analysts worry US-Iran war would impact oil supply, increase prices in the region
- A flurry of attacks in and around the Strait of Hormuz has left six oil tankers damaged since May this year
Green glamor: Young Pakistani innovators transform electronic waste into fashionable jewelry
- Jewelry crafted from electronic scrap appeals to a young demographic that values innovation, ethical lifestyle choices
- Sameer Asif began to pursue entrepreneurial dream by partnering with a classmate to launch ‘Wired Wonders’ in 2023
ISLAMABAD: In a room filled with discarded computer components and broken electronic items, 21-year-old Sameer Asif works under a bright fluorescent light, meticulously shaping an old motherboard into a heart-shaped pendant.
His project is more than a hobby; it’s the core of his entrepreneurial dream, “Wired Wonders,” a venture launched in 2023 to transform electronic waste into wearable art.
Jewelry crafted from electronic scrap aligns with a global trend in sustainable fashion, appealing to a young demographic that values innovation, individuality and ethical lifestyle choices.
Despite its niche market appeal, this form of jewelry reflects a growing interest in repurposing materials that would otherwise contribute to landfills, offering a creative solution to the challenge of electronic waste.
For Asif, however, the whole thing began as an accident.
“I was always into arts and crafts as a child,” he told Arab News in a conversation this week. “I enjoyed giving handmade things, and the first-ever necklace I made from a motherboard was also a gift for my friend.”
“She wore it to the university, and people started asking her about it,” he continued. “That’s when we thought this could actually become a business since people were interested in it.”
Asif said he was fascinated by electronics since childhood, using his tools to dismantle sophisticated gadgets to understand how they worked.
“When I was like five or six years old, on my birthday, someone gifted me a toy set of mechanical things,” he recalled. “It had nuts and screws, and it came with a screwdriver. I used that screwdriver to open my brother’s PlayStation 2 which he really loved.”
“I just opened it but couldn’t fit it back,” he recalled with a smile, saying his brother and parents were not pleased with him.
Asif partnered with his friend Maham Usman to launch Wired Wonders, asking her to manage the social media, sales and marketing.
Asked about the challenges of developing a small niche business, Usman said the biggest problem was procuring discarded motherboards that were not readily available.
“There are like one or two scrapyards in Rawalpindi where they sell discarded electronics in bulk,” she said. “To tackle this challenge, we have started a recycling initiative where we ask people to donate the electronic devices they want to dispense with. Not only will this help us with business, but it is also good for the environment.”
Making a single piece of jewelry can take about two hours. The process involves cutting and shaping motherboard pieces, removing the sharp edges and then pouring resin – a transparent, viscous liquid – over it for shine and preservation. Thereafter, the piece is left to dry for 24 hours.
Asked about the prices of their products, the Wired Wonders’ team informed that they ranged from $1.40 to $7.
“The gold and copper in motherboards add unique value to our jewelry,” Usman said.
China unveils first Hangor-class submarine developed for Pakistan
- Islamabad signed agreement for the acquisition of eight submarines during President Xi’s visit to Pakistan
- Under the contract, four submarines will be built in China, while other four will be built at Karachi Shipyard
ISLAMABAD: China on Friday unveiled the first Hangor-class submarine that it has developed for Pakistan, the Pakistani military said.
The Pakistani government had signed an agreement with Beijing for the acquisition of eight Hangor-class submarines during the visit of Chinese President Xi Jinping to Pakistan.
The first of these submarines was launched at a ceremony held at Shuangliu Base in China’s Wuhan, which was attended by Pakistan’s Chief of the Naval Staff Admiral Naveed Ashraf as the chief guest, according to the Inter-Services Public Relations, the Pakistani military’s media wing.
“Under the contract, four submarines will be built in China while the other four will be built at Karachi Shipyard and Engineering Works Limited in Pakistan,” the ISPR said in a statement.
“These submarines will be equipped with advanced weapons and sensors to target long-range targets.”
The ISPR said the project would add a new dimension to Pakistan-China friendship. China has been one of Pakistan’s most trusted friends and both countries have worked on a number of joint projects in the field of defense in recent years.
Besides, Beijing is investing over $65 billion in energy and infrastructure projects in Pakistan as part of China-Pakistan Economic Corridor (CPEC), a major segment of its Belt and Road Initiative designed to give China a shorter, more secure trading route to the Middle East and beyond, while also boosting Pakistan’s economy.
Since its initiation in 2013, CPEC has seen tens of billions of dollars funnelled into massive transport, energy and infrastructure projects. Beijing has also often provided financial assistance to bail out its often-struggling neighbor in times of a financial crunch.
Army chief stresses economic stability as key to national sovereignty at Green Pakistan conference
- General Asim Munir says army will continue to support the government with economic development of Pakistan
- He tells the gathering the military will provide comprehensive national security, work for Pakistan’s collective good
ISLAMABAD: Pakistan’s army chief General Asim Munir emphasized the importance of economic stability for a country to achieve full sovereignty while addressing the Green Pakistan Initiative conference on Friday, adding that his institution would continue to support the government in these efforts.
The initiative was launched as a response to the severe climate change impacts that Pakistan has faced over the years, including droughts, catastrophic floods, and extreme heatwaves. The program aims not only to mitigate the effects of erratic weather patterns by improving forest cover and restoring the ecosystem but also enhance the country’s resilience against future climatic shocks.
Pakistan has witnessed a growing awareness about the nexus between environmental issues and national security, prompting various sectors, including the military, to contribute to such green efforts.
“Pakistan is a blessed land with an industrious and resilient nation which needs to come together for national development,” the military’s media wing, ISPR, quoted the army chief in a statement circulated after the conference.
“Pakistan Army will continue to provide all possible support for the economic development of Pakistan,” he continued while pointing out the efforts of his institution to provide comprehensive national security and work for the collective good of the nation.
The state-owned PTV News reported the army chief warned all those who were trying to stop the country from progressing that their efforts would be wasted.
“In today’s era, the concept of complete sovereignty is not possible without economic stability,” he added.
Senior members of Pakistan’s federal cabinet were also present at the conference.
The participants reviewed the progress made under the initiative, expressing satisfaction that the country had achieved significant milestones under the program by establishing model farms, launching water management schemes and enhancing agricultural productivity.
‘Shares on fire’: Pakistan’s key stock index nears 73,000 level after hitting another historic high
- Analysts say the bullish sentiment owes to IMF talks and optimism around Saudi investment, key policy rate cut
- The benchmark KSE100 index has surged by 8,081 points since January, gaining about 80% in US dollar terms
KARACHI: Independent financial experts in Pakistan said on Friday the country’s equity market was on fire as stocks hit another all-time high of 72,739 points amid euphoria surrounding the government’s negotiations with the International Monetary Fund for another loan along with possible Saudi investment and interest rate cut optimism.
The benchmark KSE100 index ended the weekend trading session with a gain of 771.7 points despite a relative decline in the morning. However, the market rebounded in the second half and soared to a new record high, closing at the 72,739 level.
The prevailing positive momentum began at the beginning of the year, making the KSE100 gain 8,081 points since January.
“Pakistan’s share market is on fire,” commented Muhammad Sohail, CEO of Topline Securities. “It is hovering around the 73,000 mark and still soaring.”
Sohail said Pakistani stocks were “leading the pack” with nearly an 80 percent gain in US dollar terms over the past year, maintaining their number one position.
The market on Friday saw selling pressure in the morning but recovered in the second half, mainly due to the fertilizer and banking sectors.
“Initial pressure in the morning session was mainly due to the rollover week,” said Sheheryar Butt, Portfolio Manager at Darson Securities. “Later, the fertilizer sector led the buying spree, helping with the market recovery.”
Other sectors that contributed to the highest ever close included commercial banks, cement and the power sector since they collectively reversed the previous negative close and created a more bullish trend.
“Foreign inflows, a stable rupee, speculation ahead of the central bank policy rate decision on April 29, and firm IMF new loan talks played a key role in the record close,” said Ahsan Mehanti, CEO of Arif Habib Corporation.
The KSE100 index has gained 5.4 percent on a week-on-week (WoW) basis, with many attributing this positivity in the market to investor expectations of an interest rate cut in the upcoming monetary policy meeting on Monday.
The economic indicators also played a major role in the bullish trend of the stock market, particularly the current account number for the month of April which showed a 9-year-high surplus of $619 million.
Additionally, media reports that Prime Minister Shahbaz Sharif was going to Saudi Arabia where he would request the kingdom to expedite investment in Pakistan’s oil, gas, and mining sectors also kept the bullish sentiments alive.
“Investors expect that Pakistan’s prime minister will speed up the investment of $5 billion,” Butt said. “If he brings any good news, the market will see it positively.”
The stock market is also expecting that after keeping the policy rate high at 22 percent since June 27, 2023, the central bank will make some changes in its monetary policy statement next week. “Expectations are high this time,” he continued. “The interest rate can come down by 50 to 100 basis points.”
Pakistani stocks have largely witnessed a bullish trend after the country secured $3 billion in short-term financing in July last year to stave off sovereign debt default.
The government is now expecting the final disbursement of $1.1 billion of IMF financing after the approval of its executive board.
A new IMF program being negotiated by the authorities has also led to positive sentiment in the capital market and can lead to another round of bullish spells if and when it materializes.
Ex-PM Khan’s party stages nationwide protest against alleged rigging, vows to continue until mandate restored
- The party says the April 21 by-elections were manipulated by the authorities in favor of its political rivals
- Its leaders have promised to reclaim their ‘stolen’ mandate by protesting for democracy and rule of law
ISLAMABAD: Jailed former prime minister Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) party on Friday held nationwide protests against alleged rigging and vote fraud in by-polls held on April 21 over about two dozen national and provincial assembly seats, vowing to continue until its mandate was restored.
PTI leaders believe election results were manipulated in favor of their political rivals in the recent contest after already rejecting the outcome of the February 8 national polls. The party complained of harassment and state crackdown soon after the downfall of its administration in a no-trust vote in April 2022.
Khan has now directed his party from a high-security prison in Rawalpindi, where he has spent several months after being incarcerated last August, to protest against the rigging until its mandate is restored.
“It will not end here,” Shoaib Shaheen, a PTI leader who spearheaded a protest rally in Islamabad, told Arab News. “We held our peaceful protest demonstration today despite police’s harassment and threats to arrest the workers and leadership.”
Hundreds of male and female protesters responded to the PTI’s protest call in different cities including Karachi, Lahore and Faisalabad. The demonstrators were carrying the party flags and Khan’s portraits, demanding his release from the jail. Some of them were also wearing Khan’s face masks to express solidarity with him.
The PTI has already formed a six-party opposition alliance for a nationwide movement against the alleged vote fraud. The alliance held its first protest gathering in Pishin, Balochistan, earlier this month and announced next major public gatherings in Karachi and Faisalabad.
“The nationwide protests would continue until our mandate is restored,” Shaheen said. “This is not just a protest but movement for restoration of democracy and rule of law in Pakistan.”
The party maintained it had won over 180 National Assembly seats in the February 8 polls, but its mandate was just reduced to 90 seats. It also complained of being denied its due share in the reserved seats for women and religious minorities in parliament since all of its candidates had contested as independents after the Supreme Court took away the party’s iconic symbol of a cricket bat days ahead of the national polls.
“We are being denied all our democratic, legal and even basic human rights,” Shaheen said. “All Pakistanis should join us in the movement for restoration of political and economic stability in the country.”
The PTI delegations have frequently been denied by the sitting government.
Prior to the Friday protest, the Islamabad Capital Territory police imposed Section 144 of the Criminal Procedure Code (CrPC), preventing large gatherings to ensure maintenance of public order.
“Strict action will be taken against those who violate the law,” the police said in a social media post. “Blocking of roads and disruption of normal life will not be tolerated. The law is equal for all and action will be taken against violation.”
